The controlling shareholder of the Hangzhou-based pure terephthalic acid and polyester fibre company will subscribe for CNY 600.00 million-worth of stock.

Rongsheng expects the equity dilution will reduce the asset-to-liability ratio from 64.6 per cent as of 31st March 2017 to 56.8 per cent.

The company is in the process of setting up a 400,000 barrel-per-day facility on land in Zhoushan Island by 2018, a site due to double capacity by 2020.

Once this plant comes online it would be one of the top refineries in Asia and a major competitor of Reliance Industries of India and SK Innovation of South Korea.

When the site is working at full capacity it would have an output of 10.40 million metric tons a year of aromatics, such as paraxylene, and 2.80 million tons of ethylene, according to the statement.

Aromatic hydrocarbons are an important part of petrochemical raw materials and are mainly used in the chemical fibre manufacturing industry.

China’s total refining capacity totalled about 750.00 million tons as of the end of 2016 and the country’s oil consumption is expected to increase to 700.00 million tons in 2030, according to Bloomberg.

Li Zhenguang, a senior analyst at China Petroleum & Chemical, told the news provider the petrochemical sector will account for about 19.0 per cent of the nation’s crude demand by the end of the next decade from 13.0 per cent in 2016.